Finance

DeSantis' Florida Blows Away Entire Country In Competition For People And Their Wealth

DeSantis’ Florida Blows Away Entire Country In Competition For People And Their Wealth

By Ted Dabrowski and John Klingner of Wirepoints

The battle for the presidency is heating up as potential candidates Gov. Gavin Newsom of California and Illinois’ Gov. J.B. Pritzker continue to go after Florida Gov. Ron DeSantis.

Newsom just ran ads decrying the lack of “freedom” in Florida. And Pritzker recently traveled to Florida to give a speech ripping the state and Gov. DeSantis’s policies of “racism, homophobia and misogyny” and declaring that DeSantis is “just Trump with a mask on.”

Listening to just those two, you’d be forgiven for thinking that Americans have been leaving Florida in droves – not only to escape DeSantis but also the policies set by the previous two decades of Republican governors.

To the contrary, Florida is the big winner when it comes to the state-to-state competition for migrating Americans and their money. California and Illinois, meanwhile, remain two of the nation’s biggest losers.

The most-recent state-to-state migration data released by the Internal Revenue Service shows Florida netted a gain of 167,000 residents (tax filers and their dependents) in report-year 2020 – the most in the nation. In contrast, the IRS data shows California lost 263,000 residents and Illinois lost 101,000 residents that same year.

Those findings are based on a Wirepoints’ analysis of the latest 2020 domestic migration data provided by the Internal Revenue Service. The IRS reviews tax returns annually to track when and where people move. It also aggregates the ages, income brackets and adjusted gross incomes of filers.

The income of tax filers is particularly interesting for Florida, as the amount of wealth moving into the state is extraordinary when compared to other states.

In report-year 2020, Florida gained a net $23.7 billion in Adjustable Gross Income from residents moving in. That was the nation’s most, by far – as much as the next six states’ AGI gains combined. Texas, in 2nd place, gained only $6.35 billion and 3rd-place Arizona got $4.8 billion.

And again, California and Illinois were big losers, seeing $17.8 and $8.5 billion in AGI disappear, respectively.

Florida was also one of the nation’s big winners when measuring income gained as a percentage of the state’s total AGI. Florida gained the equivalent of 3.3 percent of its total AGI in 2020, the 4th-most in the nation behind Montana, Wyoming and Idaho.

The increase in Florida’s AGI is not only a function of netting new residents from other states. It’s also from the fact that those moving into Florida have far bigger incomes than those moving out. It’s almost a factor of two to one.

Those inbound to Florida reported incomes in 2020, on average, of $121,820. In contrast, those leaving Florida made, on average, just $68,104.

Florida attracts everyone

Importantly, it’s not just the wealthy and retirees moving into the Sunshine State. During Gov. DeSantis’s first year in office, Florida attracted residents from every age and income bracket. (See the appendix for a detailed, multi-year breakdown.)

Despite Florida’s reputation as the nation’s retirement destination, more than 40 percent of the tax filers moving in were younger than 55. Note that those numbers only include tax filers – not their dependents. Given that most dependents are children, it’s likely Florida’s migratory demographics are even more balanced than they appear – the state is filling up with far more people than just retirees.

And 2020 was not a one-off. Florida has been attracting residents for at least two decades with only a short pause in 2008 and 2009 due to the foreclosure crisis that hit Florida particularly hard.

In all, Florida has gained a net 2.3 million residents since the year 2000. On average, those residents have brought about $9 billion in fresh AGI with them each year, dramatically strengthening the state’s tax base.

In contrast, Illinois has lost nearly 1.4 million residents over the same period, with an average of $3 billion in AGI lost each year as a result.

Governors Pritzker and Newsom may decry Gov. DeSantis’s policies and Florida in general, but the IRS migration numbers show that Florida is winning the war for people.

And that includes Californians and Illinoisans – thousands of whom move to the Sunshine State every year, billionaire Ken Griffin of Citadel being just the latest example.

Look for Wirepoints to lay out the details of the one-sided migration from California and Illinois to Florida soon.

Appendix

Tyler Durden
Mon, 07/25/2022 – 17:25

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